Based on a new survey of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found council budgets being strained by the increasing figures of children and adults requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey found.
